Expect a slight drop in prices, fewer hay acres
Western growers are going to be gun-shy about growing alfalfa and corn silage for dairies this year, which means acres will be down. Hay prices are also expected to drop slightly. That’s according to Seth Hoyt, who will be an afternoon speaker at the Feb. 8 Forage Seminar during World Ag Expo in Tulare, CA.
Hoyt, who writes The Hoyt Report, a forage market newsletter, spoke at the California Alfalfa and Forage Symposium last month. He said Western acres planted to alfalfa may be down by 5-10%, and silage corn plantings in California alone may be reduced 10-15% in 2011.
Some of those acres will be planted to cotton, wheat and corn grain.
“If the milk price drops down to the $13-13.50/cwt level early in the year, when the cost of production is in the high $13s or $14s or higher, we’re going to have another situation with … tighter money in the dairy industry. And as you know, dairies buy 75-80% of the hay in California and in the West, about 65%.”
With fewer hay acres, Western production will probably be 15-20% less than in 2009, Hoyt said.
“Trying to predict alfalfa hay prices in the West when we are looking at dairies possibly going into a negative cash flow situation is like throwing darts at the board,” he added.
Californians can expect the first two cuttings of supreme new-crop hay delivered to Tulare to bring $200-220/ton, down from recent delivered prices of $210-230.
Supreme hay in the Imperial Valley will go for $155-165/ton FOB, and in early spring in the Central Valley, it will be in the $180-190 range. If milk prices move to $16/cwt or higher, supreme hay could go for $20/ton more, Washington growers can expect $150-160 FOB for big bales of top dairy and export alfalfa hay. This past year, California exported more hay than the Pacific Northwest because of lower ocean freight rates.
In Idaho, supreme alfalfa hay prices will be around $140-150 FOB. If milk prices stay below production costs, prices will be lower.
Hoyt’s central and northern Nevada supreme alfalfa hay price forecast is $150-160 FOB, based on a $200-215 price in Tulare, CA. Western Nevada prices will be a little higher.
Utah supreme alfalfa hay prices could be $140-150/ton, as California dairies will need the high-quality hay. But that depends on dry van freight rates. Premium export alfalfa hay will be in more demand and prices will be a little below those of supreme hay.
If milk prices are at a negative cash flow, Arizona dairies will be as bearish on alfalfa hay prices as they were in 2010. But there will be less hay this year. Dairies may have to pay more for hay because of strong retail, export and California dairy hay buyer demand. “Supreme alfalfa hay prices will be around $140-150 FOB in Parker-Poston and possibly a little lower closer to Phoenix dairies.”
Alfalfa hay prices could rise if corn prices continue strong, as dairies will cut back on corn and add alfalfa to milk-cow rations. “That is why my predictions on prices may seem high if milk prices fall to the $13-13.50 level or lower. I believe hay supplies will be low enough in 2011 to keep the market from dropping substantially. Based on dairy cow numbers, there will not be an abundance of hay.”
Forage Seminar At World Ag Expo, Feb. 8
Growing high-quality forage for profitable dairy production. That’s the focus of the 2011 Hay and Forage Seminar at World Ag Expo, Tulare, CA. Sponsored by Hay & Forage Grower and Mycogen Seeds, the seminar will be held Feb. 8 at the Seminar Center.
The 10 a.m.-3 p.m. program starts off with practical advice on selecting silage corn hybrids to fit a herd size, storage options and milk production goals by crop production expert Everett Thomas of Oak Point Agronomics. He will also discuss how tonnage, digestibility and net energy factor into silage hybrid choices in today’s economic climate.
At 11 a.m., participants will learn how to evaluate forage quality to cost-effectively balance rations for high milk production. Jerry Higginbotham, University of California farm advisor, will review forage quality measurements and their impacts on dairy rations, production and economics of dairy farming.
An invitation-only awards luncheon will be held at noon to announce winners of the Forage Challenge alfalfa hay and corn silage contest. Finalists’ entries will be on display in the South Expansion Area of the show grounds.
Seth Hoyt of The Hoyt Report will, at 1:30 p.m., give producers the latest information on market factors impacting alfalfa and other forages in the Western states. He’ll explore what fewer hay acres in production will likely do to the market.
At 2 p.m., the new genetics of Roundup Ready alfalfa and beyond will be discussed by University of California Extension forage specialist Dan Putnam. Hear what impact transgenic technology can have on alfalfa.